MOHEEMA LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question involved in this writ petition is relatable to the payment of interest by the Government under S. 214 of the INCOME TAX ACT, 1961, (hereinafter "the Act"). Under that provision of law interest is payable by the Government at the stipulated rate on the amount by which the aggregate sum of any instalments of advance tax paid during any financial year in which they are payable under ss. 207 to 213 exceeds the amount of tax determined on regular assessment. The question for decision is if the advance tax had not been paid on the dates specified for this purpose but had been paid during the entire financial year whether on the excess amount interest would be payable by the Government ? A similar question, of course, relatable to S. 215 of the Act, dealing with interest payable by the assessee, was examined by this Court in Sookerating Tea Co. vs. CIT (1989) 75 CTR (Gau) 39 : (1988) 2 GLR 231 : TC4R.702 and it was held that the payments within the financial year after the due dates should not be excluded as payments are made towards tax liability covering the financial year.

(2.) SHRI Choudhury, however, submits that the same ratio would not apply in case of interest payable by the Government under S. 214 because S. 211 of the Act has laid down the dates by which advance tax has to be paid in instalments. In this connection he has also referred to Kangundi Industiral Works vs. ITO (1980) 14 CTR (AP) 328 : (1980) 121 ITR 339 (AP) : TC4R.546, a decision of the Andhra Pradesh High Court and to A. Sethumadhavan vs. CIT (1980) 16 CTR (Ker) 376 : (1980) 122 ITR 587 (Ker) : TC4R.574 which have taken the view as put forward by Shri Choudhary.

(3.) THE petition, is, therefore, disposed of by stating that interest would be payable by the Government on excess advance tax even if the tax had not been paid on the due date but had been paid during the financial year. The order of the Commissioner by which he refused to pay interest under S. 214 is, therefore, set aside and the Department is directed to pay interest in the light of the observation made above.